Ford, United Autoworkers reach tentative contract agreement without a strike

Sunday, November 4, 2007

The deal must be ratified by the UAW's members covered by the contract at Ford.

DETROIT -- The United Auto Workers union reached a tentative four-year contract agreement with Ford Motor Co. on Saturday, avoiding the threat of a strike against the struggling automaker, the union said.

The deal, reached around 2:20 a.m., must be ratified by the UAW's approximately 54,000 members covered by the contract at Ford. If approved, it would bring a close to historic negotiations that have yielded agreements designed to return U.S.-based automakers to profitability.

Details of the Ford agreement were not immediately released, but a person briefed on the deal said six plants the automaker had planned to close will remain open for now and the company has promised future investment at U.S. plants.

In exchange, the agreement will include payment of lower wages to thousands of new hires -- a provision already agreed to in contracts with General Motors Corp. and Chrysler LLC. The person requested anonymity because the union hasn't yet released details.

The GM and Chrysler pacts -- which were reached after short strikes against the automakers -- include a union-run trust that would take over the companies' retiree health-care obligations.

In a statement, Ford confirmed that the deal includes the retiree health-care trust fund and said the trust is subject to approval by courts and the U.S. Securities and Exchange Commission.

"Though we will not discuss the specifics of the tentative agreement until after it becomes final, we believe it is fair to our employees and retirees and paves the way for Ford to increase its competitiveness in the United States," Joe Laymon, Ford's group vice president for human resources and labor affairs, said in the statement.

Ford is financially the weakest of the Detroit Three automakers, having lost more than $12 billion last year. The company has mortgaged its assets -- including its blue oval logo -- to fund turnaround efforts.

The deal came after a bargaining session that lasted more than 41 hours at the automaker's headquarters in Dearborn.

"Our bargaining committee came through for our active and retired members," UAW President Ron Gettelfinger said in a statement.

The deal encourages Ford to invest in its products while addressing the economic needs of union members, Gettelfinger's statement said.

"We face enormous challenges -- and we also have enormous potential," UAW Vice President Bob King said in the statement. King, the chief union negotiator with Ford, said the union's goals were to win new product and investment from the company, get job security and protect seniority rights.

"We made progress in all these areas," he said.

People who had been briefed on the bargaining late Friday said that throughout the lengthy negotiating session, bargainers were weighing the UAW's demand for promises that new vehicles will be built at U.S. factories against the company's desire to further downsize its manufacturing capacity to match lower demand for its products.

The people did not want to be identified because the talks were private.

One of the people said Ford wanted to reduce its U.S. hourly work force by 13,000 more employees through additional buyout and early retirement programs. The union wanted the company to spare from closure some of the six factories that it intends to shutter, both people said.

Ford already has announced its intent to shut down 16 factories as part of a restructuring plan. The company has identified 10 of the closures, but has yet to announce the remaining six. The closures are to be fully completed by 2012.

If more workers leave, some of them could be replaced by so-called "noncore" employees who would be paid on a lower wage scale, starting around $14 per hour. An average Ford hourly worker made $28.88 per hour in 2006, according to the company. The change would help make Ford more competitive with its Japanese rivals that have U.S. factories.

Going into this year's contract talks, U.S.-based automakers said they had about a $25-per-hour total labor cost gap when compared with the Japanese.

Ford's four-year contract with the UAW expired Sept. 14 but had been extended while negotiations continued.

Depending on its features, the contract may face a tough ratification vote at Ford because of Chrysler's actions on Thursday to cut 8,500 to 10,000 hourly jobs and 2,100 salaried jobs through 2008, or about 15 percent of its work force.

Thursday's layoffs came less than a week after Chrysler workers ratified a new four-year deal with the company that had job security guarantees at many plants at least for the life of the contract.

Under the new Chrysler contract, workers will get about 95 percent of their pretax pay for 48 weeks, then would go into a "jobs bank" for up to two years if there are no jobs open in the company. After the two years, the UAW and Chrysler would negotiate a plan for workers, a summary of the contract says.

But Gary Walkowicz, a worker and former local union official at a Ford truck plant in Dearborn, said talk on the assembly line Thursday was that workers at Chrysler and GM were deceived by job security pledges.

"It's pretty clear that both at General Motors and Chrysler, the workers were lied to," Walkowicz said.

In October, GM announced layoffs of more than 1,700 people at three plants in the Pontiac, Detroit and Lansing areas.

GM spokesman Tom Wickham said his company's job cuts were planned well in advance of the contract.

Ford is expected to announce next week that more than 30,000 hourly workers have taken previous early retirement or buyout offers.

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